How do you fit 26.5 million veterans' records on a laptop?

A friend called and asked a very interesting question regarding the story about the 26.5 million veterans' records being stolen from a VA employee's laptop computer.

How do you fit 26.5 million records on a laptop?

I've dealt with big databases on small computers before, and they're a disaster trying to open, manipulate, etc. Let alone the sheer size of the databases even fitting on a laptop hard drive.

So my question for the geeks out there is this: How big a laptop would you need to contain, and manage, the records of 26.5 million people? And the larger question: Are we getting the full story here?

And a final question: Why the hell would anyone have all those records on one laptop AND take them home?